The Impact of Gender Pay Reporting on Transgender Employees

From 6 April 2017 employers in the UK with more than 250 staff are required by law to publish the following four types of figures annually on their own website and on a government website:

·Gender pay gap (mean and median averages)

·Gender bonus gap (mean and median averages)

·Proportion of men and women receiving bonuses

·Proportion of men and women in each quartile of the organisation’s pay structure

However, this legislation does not take into account transgender or non-binary (1) employees as, according to the law, employers can only classify staff as male or female. This means that it’s up the employers themselves to work out how they are going to categorise transgender or non-binary staff.

Classifying Employees by Gender

With this in mind, it’s not easy for employers who wish to be sensitive when it comes to classifying employees by gender. ACAS recommends that employers should refer to its payroll or HMRC records as a guideline to a transgender or non-binary employee’s gender. Alternatively, an employer should try to confirm with the individual employee which gender he or she identifies with but without breaching any data protection issues.

It sounds straightforward, but employers must also be sure that they do select the correct identity whilst at the same time avoiding the risk of isolating staff.

Transitioning

It’s a myth that transitioning actually involves medical treatment.

There is a perception that transitioning involves medical treatment – but this isn’t the case. According to the Equality and Human Rights Commission code of practice states that: “the protection from gender reassignment discrimination applies to all trans people who are proposing to go, are undergoing or have undergone (part of) a process of gender reassignment. At the same time, a trans person is protected from sex discrimination on the basis of their legal sex. This means that a trans woman who does not hold a GRC and is therefore legally male would be treated as male for the purposes of the sex discrimination provisions, and a trans woman with a GRC would be treated as female. The sex discrimination exceptions in the Equality Act therefore apply differently to a trans person with a GRC or without a GRC.”

So, in essence, the commission confirms that gender reassignment is a personal process which goes beyond medical intervention and can include the conscious decision to ‘identify with another agenda’.

The issue for employers is that they may not know that an employee is in the process of transitioning and so their report on the gender pay gap could therefore be inaccurate.

Gender Pay Reporting Issues

When it comes to employees who don’t identify with a specific gender (ie cisgender employees), ACAS suggests that they should not be included in the gender pay gap report. However, this would result in these employees being excluded from any pay analysis reports.

The concern with current legislation for gender pay gap reporting is that the actual extent of the gender pay gap issue will not be accurately reported if transgender employees are not included.

A way forward would be for employers to make their own decisions when it comes to including transgender employees in their gender pay gap reports. The positive side to this approach will serve to identify where gaps in gender pay structures actually exist.